With the blockchain industry constantly evolving, Texas is working to stay on top of things. In fact, the Lone Star State has welcomed the blockchain industry with open arms. The Texas Governor signed two bills that acknowledged the legal status of virtual currencies, thus enabling crypto enthusiasts further. Texas followed in Wyoming’s footsteps and recognized blockchain and cryptocurrency in its Uniform Commercial Code, which governs commercial transactions.
Our article will cover Solana, from its inception to the present day. We’ll touch upon what makes it unique and where and how you can buy this crypto. Read on.
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What Is Solana (SOL)?
Solana is not just an ordinary cryptocurrency. It is also an open-source blockchain that utilizes new technologies to provide a scalable, fast, and advanced marketplace and decentralized applications (DApps.)
The man behind Solana is Anatoly Yakovenko, a former Qualcomm and Dropbox employee. He partnered up with Greg Fitzgerald and Eric Williams, and the trio started working on Solana in 2017. The new crypto finally saw the light of day in March 2020 when it was launched by the Geneva-based Solana Foundation.
Solana raised over $25 million through a series of public and private sales and captured the attention of several prominent crypto companies, including Serum, Multicoin Capital, CMCC Global, and others.
One of the most successful projects built on the Solana blockchain is Serum. This decentralized derivatives exchange can provide low gas fees and latency and high liquidity to its network.
How Does Solana Work?
A key aspect that distinguishes Solana is its consensus mechanism called proof of history. This algorithm can validate and handle 65,000 transactions per second. What’s more, most blockchains use either proof of stake or a proof of history consensus mechanism. However, Solana goes one step further by utilizing both. This hybrid protocol ensures fast and cheap transactions, so many investors turn their heads toward this crypto.
As opposed to proof of stake, which is used to validate blockchain transactions, proof of history can verify their order and the passage of time between them. Every transaction on the blockchain has a built-in timestamp. Because of this, nodes that confirm transaction times do not all need to communicate with each other. Thus, PoH reduces the work validators have to do, resulting in shorter processing times.
Being an open-source network means that it can be used in various ways. This includes developing DeFi platforms (decentralized crypto exchanges) and selling, trading, and mining NFTs. The Solana network has also developed a free payment system, Solana Pay, which merchants can use to accept payments directly from customers. This way, businesses don’t have to pay high processing fees.
SOL Token Explained
Solana has its own native token, the SOL token, used for all blockchain transactions.
One of the benefits it offers is the possibility to earn passive income by staking SOL tokens. The PoS used to validate transactions allows you to stake your coins and earn rewards. This requires you to pledge your SOL tokens to a validator that verifies cryptocurrency transactions. Then, the validator receives a portion of a block as a reward for sharing a piece with the person who stakes it.
However, you should not raise your hopes too high and expect overnight success, considering the process takes time. Plus, Solana is highly volatile, and its price fluctuates within seconds.
Solana in Numbers
Although Solana is a new kid on the block, it ranks among the top 10 cryptos. Unlike Bitcoin, whose total token supply is very well-known, Solana’s circulating supply exceeds 334 billion coins, while its maximum supply is unlimited. Its live market cap is over $30 billion, according to CoinMarketCap.
The SOL price was $0.88 during its launch in April 2020. The numbers remained the same for the next few months until the SOL finally started to scale up in January 2021. Like with all cryptos, its price has fluctuated but eventually went on the bull run in July 2021 and reached its all-time high of $258 on November 6, 2021. Currently, the SOL token is worth around $90 (as of May 2022).
Crypto Laws in Texas
In an effort to make Texas the crypto capital, Gov. Greg Abbott signed HB 4474 (Virtual Currency Bill) and HB 1576, which included cryptocurrency into the state’s Uniform Commercial Code. This helped Texas position itself as a hub for crypto investors.
Furthermore, the state’s Department of Banking announced in 2021 that banks now have the authority to provide safekeeping services for virtual currency. Banks can now act as third parties and have custody over the holders’ wallet keys and other essential documents. Crypto holders can even transfer their digital currencies to the bank if they wish.
And Texans who want to sell, buy, trade Solana or other cryptos don’t need a license for that, according to the Texas Department of Banking.
Where Can I Buy Solana in Texas?
Texas residents interested in buying SOL tokens have two options — purchasing from a centralized crypto exchange or another SOL owner directly. We’ll discuss both options further in the text but focus on the former more since it is a safer and faster option.
Centralized Crypto Exchanges
There are two types of crypto exchanges — centralized and decentralized. Centralized crypto exchanges are an essential trading vehicle since they allow you to buy, see, and trade crypto with fiat money or other cryptos. This means that a third party that handles the assets of buyers and sellers is involved. On the flip side, decentralized crypto exchanges do not include any mediator as they allow a peer-to-peer exchange.
Exchanges offer monitoring and security that individuals can’t achieve alone. SOL holders trust that the chosen exchange will safely complete transactions and connect them with trading partners.
Some popular centralized crypto exchanges available to Texans are Kraker, Binance, Gemini, and Huobi Global. Therefore, buying Solana via a centralized exchange is the safest and fastest option. Here is what you need to know before you become an SOL owner:
- Availability of SOL in Texas — So many centralized crypto exchanges work on US territory. However, not all of them are available to Texans. Make sure the platform you choose offers its services to your state’s residents.
- Accepted cryptocurrencies — Exchanges trade with different cryptos, so you need to find the one that supports SOL tokens.
- Used interface — A user-friendly site is equally important to beginners and crypto veterans. If it is easy to navigate, the operation will work seamlessly.
- Associated fees — Each crypto exchange will charge you for transaction and conversion services. Make sure the fees fit your budget and don’t have any hidden fees.
- Limits — You should also be aware that these platforms often impose withdrawal fees. Furthermore, some even limit how much you can deposit/withdraw daily or monthly.
- Security — Since this is the most important factor by far, you should learn what security protocols your chosen exchange applies to protect its users. Additionally, inform yourself of any past security breaches or hacker attacks and how the exchange handled those.
- Liquidity — Each exchange has a different number of users. The more users there are, the quicker and easier your transactions will be. Ensure that the platform you opt for has regular SOL trades. Plus, look for the exchange that guarantees pricing or locked-in trades.
- Payment methods — Crypto exchanges often partner with several payment processors. If you are interested in a particular exchange, check out the payment methods it offers and decide if they suit your needs.
- Reputation — Read other people’s reviews and comments on the internet and social media to see if they recommend the exchange you chose.
If using a crypto exchange sounds too complicated and you don’t want to go through the verification process and reveal your sensitive data, another option for acquiring SOL coins is buying them from another holder directly. This may sound easy, but it is risky. Unless you buy from a trustworthy person, you cannot guarantee their intentions.
This is why exchanges are more popular since they offer that level of security for all parties. You cannot achieve this when purchasing directly.
How to Buy SOL on an Exchange — Step-by-Step Guide
Getting registered on an exchange is quite simple, though some people are hesitant to sign up because they think it is complicated. Worry not — we have created this step-by-step guide to lead you every step of the way so you can complete the registration process hassle-free.
- Set up a wallet — The first step is to find a digital wallet since this is where you’ll store your SOL tokens. We recommend choosing one from the list of available options on the official Solana website.
- Pick an exchange — You can opt for one of the exchanges mentioned earlier or find the one that meets all your needs. Either way, make sure it features all the previously discussed factors.
- Create an account — Head to the official website of your exchange, complete the registration form, submit the necessary information, and verify your account.
- Make a deposit — Fund your account with the preferred payment method. Once the funds appear on your balance, find the option to buy SOL.
- Buy SOL — Select the desired amount of SOL tokens you wish to purchase and hit the Buy button.
- Transfer SOL coins to your wallet — You can leave the tokens in your account if you plan to further trade with them. However, it is best to withdraw them to your wallet for the extra layer of security.
Solana represents a cheaper ETH alternative with lower costs and speedier transactions. It features many different projects running in its ecosystem and is positioned among the top 10 cryptos globally. Its users can stake their coins, which is another perk it offers. However, there is no doubt that it is a high-risk investment. This is the case with all cryptos since they are highly volatile.
We advise investing in Solana only the amount you can afford to lose. It is better to dig a little deeper, and follow the latest crypto numbers and trends, especially if you are a beginner in the crypto world. Before investing in crypto, it is also a good idea to consult a crypto expert.